The young phenom bantamweight stayed unbeaten in the UFC, knocking Torres out in just 3:18 of the first round.
McDonald dropped Torres with a well-time uppercut and pounced on him with right hands from the top that knocked the former WEC champ unconscious.
"I was worried about his range," he said. "I was trying to make sure he didn't get that jab off which he did a few times. I was trying to get inside, and use my power and accuracy. That's what I was banking on."
Even before the finish, McDonald showed some early aggression in the first with a flurry that included a scoring uppercut and body shot. He clipped him a short time later with the uppercut that led to the finish.
"I feel great," he said. "I can finally eat some pizza and ice cream. I'm going to party tonight."
Torres couldn't walk out of the octagon on his own, needing assistance from his cornermen.
McDonald is now 15-1 overall and 4-0 in the UFC. Torres dropped to 40-5 with his second loss in three fights.